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The BenefitsLink Newsletter -
Welfare Plans Edition
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July 20, 2001 - 6,294 subscribers
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Fletcher Patients' Rights Bill Attracts Two New Backers
Excerpt: "Supporters of the patients' rights bill (HR 2315) backed by the House GOP leadership on July 19 'paraded' two additional Republican votes that they have 'peeled away' from the rival bill sponsored by Reps. Charlie Norwood (R-Ga.), John Dingell (D-Mich.) and Greg Ganske (R-Iowa), CongressDaily/AM reports." (KaiserNetwork.org)

G.O.P. Moderates Deal New Setback to House Leaders
Excerpt: "Next week, House Republicans will be taking up the patients' bill of rights legislation that has heavy Democratic support and backing from some Republican moderates. House leaders are in a struggle to defeat the bill and to pass own that contains a less expansive right to sue health maintenance organizations." (New York Times; free registration required)

Consumers Union Publishes Letter Supporting Ganske-Dingell-Norwood Patients' Rights Bill
Excerpt: "Dear Representative: We are writing to urge you to support the Bipartisan Patient Protection Act of 2001 ... We urge you to oppose including broad expansion of Medical Savings Accounts (MSA's), federally-certified Association Health Plans (AHP's) and tax credits for individual health insurance premiums in the managed care bill." (Consumers Union)

Dispute Over Termination Date Means COBRA Claim Proceeds
Excerpt: "Because an employer and former employee disputed when a termination of employment occurred -- which would affect whether a COBRA notice was timely or late -- a federal district court in North Carolina rejected a motion to rule in the employer's favor. Therefore, the issue of whether the employer violated COBRA's notice rules will be resolved in future proceedings." (Thompson Publishing Group)

Employee Didn't Enroll in ERISA Plan, So Can't Sue for Benefits After Employment Terminates
Kamler v. H/N Telecommunication Serv., Inc. (N.D. Ill. 2001). Excerpt: "This dispute is about whether a newly-hired employee was sufficiently informed that enrollment in his employer's group health plan was a condition of plan coverage.... [W]here plan coverage is conditioned on filling out an enrollment form, enrollment materials should be drafted to explain this fact in clear and simple terms." (EBIA Weekly)

Plan Definition of Total Disability Controls, Even If Plaintiff Returned to Work Due to Hardship
Galman v. Prudential Ins. Co. (8th Cir. 2001). Excerpt: "The plan used a three-pronged test for 'total disability,' requiring that the claimant ... not be working at any job ... The insurer denied the appeal [of the denial of the plaintiff's LTD claim because] the plaintiff had returned to work. The plaintiff argued that he returned to work involuntarily and only out of financial necessity, even though he was totally disabled." (EBIA Weekly)

HMOs Exercising Right To Sue Patients
Excerpt: "Health insurers who are trying to stop patients' rights legislation in Congress say they need to keep a federal law that shields them from costly lawsuits. Yet many health plans are going to court themselves to sue patients to recover the costs of care. Health experts say a drive for more revenue has prompted HMOs and other managed-care plans to demand reimbursement from patients who receive settlements or court awards for injuries that require medical care." (USA Today)

Beneficiary Was Entitled To LTD Benefits For His Stress-Related Condition, But Only For 24 Months
A beneficiary was entitled to long term disability benefits as a result of a stress-related condition, but that entitlement expired after 24 months under the LTD plan's limitation on benefits for 'mental or nervous disorders.' This was the decision of the Eighth Circuit U.S. Court of Appeals in Walke v. Group Long Term Disability Insurance Plan . (Spencernet)

Analysis: Significant Delay in Application of New Claims Procedure Regs for Group Health Plans
Excerpt: "The deadline to comply with the DOL regulations on claim procedures has been extended, but only for ERISA group health claims. There is no extension provided for disability and other ERISA claims, including those under 401(k) and other pension plans." (EBIA Weekly)

Ford Abandons Manager-Ranking System
Excerpt: "Grading performance on a curve may work in academia, but as of July 10 it's out at Ford Motor Co. In a major scaling back of Chief Executive Jacques Nasser's crusade to get tough on poorly performing managers, Ford said it will abandon major elements of its 'Performance Management Process,' including the practice of assigning a fixed percentage of managers every year to a 'C' category that meant no bonus, no merit raise and potentially no job." (CareerJournal.com)

Seattle Non-Profit Organization Publishes Online Video Promoting, Explaining Telecommuting
Excerpt: "Take a few minutes to watch the new Telework Works video [online] ... Learn the facts of teleworking and how other local companies are making it work for them. See how to establish a telework option for your employees and the benefits your organization will experience." (Commuter Challenge)

Bill Would Let Federal Employees Keep Frequent Flier Miles
Excerpt: "Rep. Dan Burton, R-Ind., has introduced legislation to allow federal employees to keep frequent flier miles earned on official travel. The bill, H.R. 2456 would lift a ban that has kept most federal employees from using frequent flier miles earned during official travel for personal use." (GovExec.com)

The Limits of Upcoming Long-Term Care Insurance for Federal Employees
Excerpt: "Next year, the government will begin offering long-term care insurance to federal employees, military personnel, retirees and some family members at 15 percent to 20 percent lower rates than such insurance in the private market.... Frank Titus, OPM's assistant director for long-term care, said the agency is asking potential contractors to explain what kinds of questions they will ask to screen applicants for the insurance." (GovExec.com)

Analysis: DHHS Privacy Guidance Doesn't Help Plan Sponsors Much
Excerpt: "Only a few health plan issues are addressed, including the following: ... health plans are not required to obtain patient consent to use or disclose protected health information in order to carry out treatment, payment, or related health care operations ... plans may need a specific patient authorization to obtain medical information from treating physicians for plan coordination of benefits (COB) activities ..." (EBIA Weekly)

Formularies Remain Focus of Cost-Containment Efforts
Excerpt: "In response to rising drug costs, HMOs continued to focus on formulary and utilization management. The efforts to contain these costs have included an increasing reliance on PBM formularies and other formularies to manage pharmacy programs.... The percentage of HMOs (especially group model HMOs) contracting with PBMs increased. Overall, more than 9 of every 10 HMOs had contracts with PBMs, up from fewer than 6 of 10 only 6 years before." (Medscape; free registration required)

(Following items also appear in Retirement Plans Edition)


2000 CFO Pay: Whopping Option Gains Bulked Up Compensation
Excerpt: "'These guys did well because they exercised options' at lucrative moments in 2000, rather than receiving huge incentive-based grants and raises last year, [Peter Oppermann of William M. Mercer] tells CFO.com." (CFO.com)

Analysis: the Impact of the New Tax Law on Employee Benefit Plans
Excerpt: "This article describes the significant changes affecting employee benefit plans. Note, however, that we do not cover some of the changes that affect certain types of plans maintained by only a few employers, such as ESOPs, SIMPLEs or 457 plans. It also does not cover the changes affecting IRAs." (Faegre & Benson LLP)

Dealing With Underwater Stock Options, Part 2 of 2
Excerpt: "Another alternative to eliminate underwater stock options is to give employees a cash settlement in exchange for the options, effectively canceling the underwater stock options.... It is also possible to provide a cash bonus to employees without canceling their underwater stock options.... [S]ometimes the simplest solution is to grant new stock options without making any adjustment to the underwater stock options." (Barbara Baksa of E*TRADE, published by the Foundation for Enterprise Development)




Newly Posted or Renewed Job Openings (Post Yours!)
Health and Welfare Associate Consultant for Arlen Group
in CA
Employee Benefits Tax Manager for PricewaterhouseCoopers
in MA, PA
Senior Compliance Specialist for Putnam Investments
in MA
401(k) Client Service Manager - Full or Part Time for Independent 401(k) Advisory Firm in Harrisonburg, Virginia
in VA



Newly Posted Press Releases
ExpertPlan Develops Flexible TPA Online Product (ExpertPlan)
U.S. Bank Selects ExpertPlan to Provide Private Label Web 401(k) Product (ExpertPlan)
Bankers Systems to Transition out of Qualified Plan Recordkeeping (Bankers Systems, Inc.)

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Copyright 2001 BenefitsLink.com, Inc., but you may freely distribute this email newsletter in whole. This newsletter is edited by David Rhett Baker, J.D.